Vodafone Group plc

  • 29 May 2003
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Rating: A2/A

Tranche 1: Eu750m
Maturity: June 4, 2018
Issue/re-offer price: 99.922
Coupon: 5%
Spread at re-offer: 70bp over mid-swaps; 125bp over the 4.5% January 2013 Bund

Tranche 2: £150m (fungible with £250m issue launched 22/06/01)
Maturity: July 10, 2008
Issue/re-offer price: 108.187
Coupon: 6.25%
Spread at re-offer: 60bp over the 5% March 2008 Gilt

Launched: Wednesday May 28
Joint books: Barclays Capital, JP Morgan

Bookrunners' comment:

Barclays - On Tuesday Vodafone announced impressive results. The company wanted to take advantage of their good news to do some opportunistic funding and lengthen their credit curve in euros.

Vodafone's longest outstanding bond is a 2015, which was trading at 65bp over mid-swaps. There are still a lot of buyers of long dated corporate paper that would support a new issue.

We went out with price guidance for the 15 year at 70bp over and we managed to price the deal in 24 hours with the book at just under Eu1bn. Demand was pan-European with the heaviest orders out of Italy, France, Switzerland, and the UK. There was also some take up in Asia.

Since launch the bonds have performed, trading two points tighter on the bid side against the Bund.

This was a speedy exercise. The borrower has a significant following in Europe and there is lots of room in European portfolios for this name. Even at relatively tight spreads Vodafone is a great name to buy.

In addition to the euro tranche we launched a £150m tap of the 2008s to offer more liquidity for this issue. The bonds were placed largely in the UK but there was also demand out of continental Europe.

JP Morgan - Vodafone announced excellent results this week, showing free cashflow doubling to £5bn. On the back of that news, the company went out to the market with plans to issue Eu750m in 15 years and a £150m tap of its outstanding 2008 issue.

Within a 24 hour marketing period we were able to price the deal Wednesday afternoon with a comfortable oversubscription. The book totalled Eu1bn on the 15 year tranche. The sterling book was shut when the deal was subscribed.

The books was of a high quality and dominated by European insurance companies in France, Italy and Switzerland.

The deal was priced at mid-swaps plus 70bp. Demand for quality long dated assets is such that we were able to price flat to the secondary curve and the bonds tightened 3bp on the break.

Market appraisal:

"...far too expensive for us as there is very limited upside potential. With a new CEO coming on board that will want to make his mark, the consequences of which are likely to be credit negative, Vodafone is by no means a risk free credit.

We stayed clear of this one."

"...the deal had a great response. Many banks were bidding for this deal and I have to admit the leads were exactly where we were on this. The deal is fully sold.

The market is so hot in the 15 year part of the curve and for this name, which is the crème de la crème of the telecoms world, 70bp is just perfect."

"...this was a good deal, well done and well spotted by the leads. It was an aggressive trade but there has been a lot of demand at the long end, which has bolstered the success of this issue.

The performance of their recent issues has helped as well as them offering a 5% coupon."

  • 29 May 2003

All International Bonds

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 JPMorgan 92.59 388 8.96%
2 Citi 85.30 278 8.25%
3 BofA Securities 63.15 265 6.11%
4 Barclays 58.01 223 5.61%
5 Deutsche Bank 55.74 184 5.39%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 60.87 123 14.06%
2 Credit Agricole CIB 28.59 93 6.60%
3 Santander 25.41 90 5.87%
4 JPMorgan 23.88 61 5.52%
5 UniCredit 21.51 103 4.97%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 2.07 11 10.42%
2 BofA Securities 1.40 6 7.01%
3 Citi 1.37 7 6.87%
4 Morgan Stanley 1.36 6 6.85%
5 JPMorgan 1.31 7 6.59%